A look at AstraZeneca
AstraZeneca (AZN) is a leading pharmaceutical company that manufactures primary care products and specialty care products. Despite having headquarters in London, it reports its revenues in US dollars. The company is set to release its 4Q17 earnings on February 2, 2018.
The above chart compares the revenues and EPS (earnings per share) for AstraZeneca since 1Q16 and estimates for 4Q17. Wall Street analysts estimate that AstraZeneca will report EPS of $0.71 on revenues of $5.4 billion for 4Q17, compared to EPS of $0.61 on revenues of $5.6 billion in 4Q16.
Analysts estimate that AstraZeneca’s top line will be $5.4 billion for 4Q17, a 2.5% decline compared to $5.6 billion in 4Q16. The decline in revenues is expected to be driven by lower sales of respiratory products, cardiovascular and metabolic disorder (or CVMD) products, and products including FluMist, Nexium, and Seroquel XR, partially offset by strong sales of oncology products Iressa, Lynparza, and Tagrisso.
Analysts also estimate the company’s gross profit margin to improve from 79.3% in 4Q16 to 80% in 4Q17. The decrease in selling, general, and administration expenses and an increase in research and development expenses could negatively impact its EBITDA (earnings before interest, tax, depreciation, and amortization) for 4Q17. The EBITDA margin for 4Q17 is estimated at 38.2% compared to 41% in 4Q16. Analysts estimate that its net adjusted income will be $1.1 billion.
Analysts estimate AstraZeneca’s top line at $22.1 billion for 2017, a 4.1% decline compared to $23 billion in 2016. The decline is expected due to lower sales of respiratory products, CVMD products, and other products, partially offset by an increase in sales of oncology products.
Analysts estimate its gross profit margin to decrease marginally to 81.8% for 2017 compared to 82% for 2016. Net adjusted income is estimated at $4.9 billion for 2017.
The Vanguard FTSE Developed Markets ETF (VEA) holds 8.6% of its total investments in healthcare companies. It has 0.4% in AstraZeneca (AZN), 0.4% in GlaxoSmithKline (GSK), 0.5% in Novo Nordisk (NVO), and 0.9% in Novartis AG (NVS).